Silver has struggled to establish a clear direction after its recent selloff, with the metal trading around $52 as higher U.S. interest-rate expectations continue to pressure precious metals.
But macro analyst Sunil Reddy believes traders looking for another large silver decline may be overlooking an interesting signal coming from platinum.
His argument is based on the relationship between two ratios: Gold/Platinum and Gold/Silver.
Gold/Platinum has started falling rapidly, showing that platinum is outperforming gold. Gold/Silver, however, remains relatively elevated.
Reddy believes that gap may eventually close, with silver potentially following platinum and beginning to outperform gold.
What you'll learn 👉
Platinum May Be Giving Silver an Early Signal
The chart plots the Gold/Silver ratio alongside Gold/Platinum over roughly the past year.
Historically, the two have moved in broadly similar directions.
When platinum and silver strengthen relative to gold, both ratios tend to decline. When gold outperforms the white metals, the ratios rise.
Recently that relationship has broken down.
Gold/Platinum has fallen from close to 3.0 toward roughly 2.58, showing a substantial rotation toward platinum.
The Gold/Silver ratio has not followed nearly as aggressively and remains around the mid-to-upper 70s.
Reddy interprets that divergence as silver being late rather than permanently disconnected.
If the historical relationship starts reasserting itself, the Gold/Silver ratio would need to move lower.
The easiest way for that to happen would be for silver to outperform gold.
A Falling Gold/Silver Ratio Does Not Automatically Mean Silver Price Rises
There is an important distinction in this setup.
This is primarily a relative-value signal, not necessarily a prediction that silver immediately goes straight higher in dollar terms.
The Gold/Silver ratio can decline in two different ways.
Silver could rise faster than gold, which would be clearly bullish for silver.
But the ratio could also fall if both metals decline and gold simply falls faster.
That matters today because the macro backdrop remains difficult.
Hotter-than-expected U.S. inflation has lifted expectations for another Federal Reserve rate increase in December. Markets now assign roughly an 84% probability to a December hike, keeping pressure on non-yielding metals.
So Reddy’s argument is more accurately described as a call for silver outperformance, rather than a guarantee of an immediate silver rally.
Read also: Silver Price Today: $190 Billion Added Since Democrats Won the Midterms
Silver Still Faces Real Bearish Risks
There are also reasons to take the opposite side seriously.
Metals Focus warned that silver’s physical-market backdrop has weakened considerably.
London vault inventories have risen, silver-backed investment products have suffered substantial outflows, speculative futures positioning has fallen and physical bullion demand has cooled.
The firm noted that the Gold/Silver ratio moved above 76, compared with a range of roughly 60 to 70 through much of the summer. It also expects the global silver deficit to narrow further before potentially moving into surplus in 2027.
That gives bearish silver forecasts a fundamental argument beyond the Fed.
Silver is more exposed than gold to industrial demand and speculative flows, which can make it vulnerable when economic expectations weaken.
Silver Price Forecast
Silver is currently trading slightly above $52, after recovering from the $49-$50 region earlier this month.
For Reddy’s relative-strength setup to become more convincing, the Gold/Silver ratio would need to begin following Gold/Platinum lower.
On price, silver reclaiming roughly $55 would be an important first step.
The $58-$61 area would then become much more significant, because a move through that region would provide stronger evidence that silver is no longer simply bouncing from oversold conditions.
Failure to hold roughly $50 would weaken that idea and reopen the possibility of another move toward the recent lows.
The interesting part of Reddy’s chart is therefore: timing.
Platinum may already be showing the relative-strength rotation that silver has not yet delivered. If silver eventually catches up, bearish silver price predictions based only on its recent weakness could be arriving just as the Gold/Silver relationship starts moving in the opposite direction.
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